February 13, 2014

American to look to other regional carriers for flying, Eagle president says

American Airlines will start looking to other regional carriers to handle its short-haul flights now that American Eagle's pilots union leaders voted against a new contract last night.

In a letter sent to all Eagle employees, American Eagle president Pedro Fabregas said the mainline carrier has "no choice but to begin looking for another regional carrier."

"I have no reason to believe American will offer us new large regional jet flying after these unsuccessful negotiations," Fabregas wrote.

The tentative agreement would have guaranteed that 60 of the new Embraer 175 aircraft that American Airlines Group ordered in December would be used with Eagle. In exchange for the aircraft, the pilots’ pay scales would be frozen until 2018 and profit-sharing would be eliminated.

ALPA MEC Declines to Send Agreement to Our Pilots for a Ratification Vote

Dear Team,

I am extremely disappointed the Master Executive Council (MEC) of the Air Line Pilots Association (ALPA) decided yesterday not to send the Tentative Agreement (TA) to our pilots for a ratification vote. Unfortunately, their decision to deny our pilots a vote means the loss of what would have been a very important opportunity for each individual pilot, our company and all the people who work here.

Before discussing what this means for us moving forward, I want to give you some background about what happened between the time the negotiations began and yesterday’s MEC decision. Beginning last December, our team worked tirelessly with the MEC’s negotiating committee to craft an agreement that not only contained compromises by both sides, but also would have benefited both the company and our pilots. On Jan. 10, the MEC ultimately agreed to what became the Agreement in Principle (AIP). The parties then began working over the last month to develop detailed contract language from the AIP to create the TA.

The TA’s terms addressed each of the most important priorities for our pilots that ALPA identified, while staying within the economic framework supported by company. If ratified by our pilots, it would have: enhanced our pilots’ job security; improved their ability to quickly advance their careers here and at American Airlines with industry-leading flow through; provided us with our first-ever fleet commitment for a minimum of 170 aircraft; and ensured the placement of new, larger regional jets, the Embraer 175s (E175), at our company. The resulting language from this back and forth was deemed satisfactory and in keeping with the AIP by both the company and the MEC’s negotiating committee. This was then sent to the MEC and yesterday they declined to send it out for a pilot vote.

American has now informed us they have no choice but to begin looking for another regional carrier or carriers to operate their E175s. American has held off on making this decision as long as possible, as they wanted to give our pilots the chance to do this flying. This was discussed with ALPA and with yesterday’s MEC decision, American can’t wait any longer and will begin these efforts immediately.

American Eagle Airlines will continue to work toward making our flying operation as competitive as possible while addressing the downsizing of our fleet and related staffing in the coming years. Unfortunately, many difficult decisions will have to be made during this time. We will proceed with retiring some of the smaller aircraft in our current fleet. American can also be expected to look for more economic options to provide regional feed and, eventually, other and more cost-effective carriers will fly the larger aircraft currently on our certificate such as the Bombardier CRJ700s.

While the AIP would have offered our pilots and our flying business a robust future, I do want to stress our company does not and has not relied on flying alone to generate growth and revenue. American Eagle Airlines will remain an airline, even with our reduced flying operation. The ALPA MEC’s statement asking us to provide a timetable for the company's "liquidation" is not something we can provide as we are not planning to shut down the airline. Our ground handling operation continues to thrive and we have added new business and employees there at a rapid pace and will aggressively seek to continue this trend. The MEC’s decision does not change or impact this and opportunities still exist there, but I have no reason to believe American will offer us new large regional jet flying after these unsuccessful negotiations.

I commit to keeping you updated on this process, news and developments as we move forward and as more details are known.

As always, thank you for all of your work on behalf of our customers and company.

Comments

Does the statement sound like a good deal to you, "In exchange for these new aircraft pilot pay would be frozen to 2018 and profit sharing would be eliminated". And beatings will continue until further notice. This from a company that is consistently at the bottom of the rankings for on time performance, customer satisfaction, and mishandled bags. This is one of the worse run feeders to the new AA network. They were recently fined $900,000.00 by the federal government for violating the 3 hour rule for keeping people on the jets on the ground on Xmas day 2012. Makes you wonder what is going on at the management of the new American Airline group which American Eagle operates under. The only problem with the statement that American Airlines has no choice but to seek other subcontractor carriers to feed there network is where will they find new pilots to fly those jets. The pilots shortage is here now. See this link where another feeder Republic Airways is having to cut back on there future flight schedule for lack of qualified pilots.http://www.reuters.com/article/2014/02/11/republic-planes-idUSL2N0LG0VI20140211
This is just another management grab to get a contract to keep the cost down as low as possible before market forces start to cause pilot pay to increase because of a lack of qualified pilots. Soon all the large legacy Airlines combined will be hiring over 300 new pilots per month and we will see who flys those proposed new jets they are talking about. This story is far from over. Stay tuned! Good Management is hard to find these days.

The elected union officers and representatives did what a union is supposed to do - protect its member's pay, benefits and work rules. During bankruptcy management demanded $45 million in contractual "give-backs". The pilots agreed to the $45 million management demanded. Ten (10) days out of bankruptcy management demanded more "give-backs". The reason management is angry is that the elected union representatives did not send the latest set of management demands to the pilots; management had developed a fear campaign to intimidate and threaten the pilots into giving up more of their negotiated contractual rights. The union stopped the fear campaign.